WHITTIER – Just like every year since 2008, the Whittier City Council in 2012 will again be faced with a budget deficit.

The City Council will meet at 4 p.m. Tuesday in a special meeting at Palm Park, 5703 Palm Ave., to discuss its budget, which is estimated to be $4.6 million in the red.

City Manager Jeff Collier looks to fill the deficit with the proposed leasing of unused water rights to raise nearly $2million, cutting $507,000 through elimination of six positions and relying on reserves for the rest.

Collier also said that $1.6 million of the deficit is what the city calls its “non-operating costs,” which he called the amount “fuzzy.”

Most of the $1.6 million is budgeted as a loan to the city Redevelopment Agency.

In past years, there’s been money from the Redevelopment Agency to pay back city loans.

But for now, the city can’t count on that because of state legislation eliminating redevelopment.

“That’s probably not as crystal clear a picture as we’d normally have,” Collier said about the non-operating fund.

“In the past years, we had a more defined revenue and expenditure stream,” he said. “Here, there are redevelopment issues that are still outstanding.”

Still, Collier’s budget is again tight with little room for growth.

The proposed city’s general fund budget for fiscal 2012-13 of about $57.5 million is up by about $1 million from fiscal 2011-12.

That’s down from the $66.9million budget in fiscal 2008-09 when the recession began.

The city’s sales tax revenue in the last four years has fallen from about $10 million to a projected $8.3 million this year as a result of the loss of seven auto dealerships along Whittier Boulevard.

“It’s a reasonable budget in light of the ongoing fiscal environment that we’re in,” Collier said. “Clearly, the economy is starting to improve, so we are seeing modest increases in property and sales tax.”

Property taxes are expected to grow by about $100,000 and sales tax by nearly $300,000.

Collier’s proposed budget cuts would eliminate a civilian code enforcement position in the Police Department, a position in the Controller’s Office and four of five positions in the area of economic development.

Redevelopment and federal money used to pay for all of those positions, but the former is gone and the latter is expected to be down, said Rod Hill, city controller and director of human resources.

Collier has proposed spending $200,000 on an economic development program that would have one employee and limited programming.

There are few increases in the city budget, and most are for some merit pay increases, as well as a contractually required salary hike for police that is scheduled for Jan. 1, Hill said.

Health insurance will jump from $4.6 million to $5.1 million for all the city employees of Whittier.

“We just got our rates, and they’re going up a little less than 10 percent,” he said. “Our employees will share in about 50 percent of any increase.”